Monday, March 02, 2009

As Economy Keeps Declining,

Columnists Chide Incumbents.

Paterson Seen as Bewildered

While Bloomberg is Bothered

By Shifting Party Loyalties

Henry J. Stern
February 23, 2009

The reputations of some politicians are sliding nearly as rapidly as the stock market. One reason is the depressed state of the economy. Many people have lost their jobs, and others who would be coming into the labor market this year see little hope of finding the jobs that would have been offered two years ago. Thousands of young professionals have been laid off by both large and small firms, leaving them unable to pay the substantial debt they incurred for tuition.

I learned about the extent of student borrowing for graduate school three years ago, when my son, the doctor, graduated from medical school. He was told that he was one of less than a handful of his class of 200 students who had not taken out student loans for tuition, room and board. Although the doctors are still in residencies and fellowships, many lawyers who had been earning six-figure salaries are now out of work, and without immediate prospects.

We often do not realize the interdependence of our economy until one part breaks down (in this case, irresponsibly issued subprime mortgages), and other areas collapse like the proverbial house of cards that they turned out to be. Perhaps the domino effect, or the crack in the dike, or the weakest link in the chain are more appropriate metaphors. The point is that when part of the system fails, the rest is at great risk.

Some say that the government blundered when Treasury Secretary Hank Paulson decided in mid-September to let Lehman Brothers go bankrupt. That triggered worldwide concern about the stability of banks, many of which had bought the same junk as Lehman, although to a lesser extent. The market could accept Bear Stearns being swallowed by JPMorgan Chase, but the second blow, Lehman failing, had the effect of a knockout punch. At the time Lehman collapsed, Timothy Geithner, now Secretary of the Treasury, was in charge of the Federal Reserve Bank in New York. We wonder what his role, if any, was in the decision to let Lehman sink.

Other authorities, like John B. Taylor, professor of economics at Stanford, writing in the Wall Street Journal of Feb. 9, maintain the opposite.

We clearly lack the capacity to tell who among these experts is right and who is wrong, although intuitively this appears to us to be a case where Rule 30-T applies: “The truth lies somewhere in between.”


Although it definitely affects the public mood, the financial bad news is not primarily responsible for two negative stories about political leaders that appeared today, one on the first page of the Times, and one on p23 of the Post.

In the Times, the Albany correspondents Danny Hakim and Nicholas Confessore wrote an article headed CONCEDING ERRORS AND DISARRAY, PATERSON VOWS TO REGAIN TRUST. We quote from paragraph 5, “Almost a year into his governorship, Mr. Paterson still seems adrift, many who interact with him say, and even some in his own party are privately questioning whether he has the capacity to lead the state.”

The Times story, 1495 words long, jumps to pA20, and contains many interviews with insiders, a few of whom would not identify themselves for reasons of personal security. We do not want to copy it, or even summarize each allegation. But the upshot of the well-sourced piece is that things are in a bad way in the dysfunctional executive branch of state government, and the bottom line is the governor’s inability to transact business. We will see what happens when the next Secretary to the Governor comes aboard, which will hopefully be soon.


The Post story is about an executive who transacts business very well, Mayor Bloomberg. Titled: MIKE MARCHES LEFT: How Mayor Lost His Principles, the lead op-ed column is by Jacob Gershman, who formerly wrote for the New York Sun. He begins:

“A little more than a year ago, Mayor Bloomberg starred on the covers of Time and Newsweek, poised to lead an independent movement to the White House. Now, he’s fighting off comparisons to Venezuelan strongman Hugo “El Loco” Chavez and finds himself groveling to a fellow some call a cult leader.” The column attacks the mayor’s political hegira, but doesn’t really deal with his administration of the city, which is generally conceded to have been honest and competent, if not inspiring. Some commissioners are excellent, and it was an honor for the mayor and the city when President Obama selected Housing Commissioner Sean Donovan for his cabinet as Secretary of Housing and Urban Development.

It is the political twists and turns that concern Gershman. Just as newly-minted Senator Gillibrand is moving left for her new statewide constituency, Gershman finds Bloomberg moving left by seeking the support of the Working Families Party.

That is not a crime. Obama moved left for the primaries, and to the center for the campaign. He is said to have told Bibi Netanyahu that both of them are moving to the center, from different directions. If that is true, it is not necessarily bad; reason, as well as majorities, are often found in moderation. Interestingly, Gershman predicts Bloomberg’s re-election: “It’s a safe bet that his $100 million campaign will prevail in November.” He reports that the mayor’s stature and poll numbers are shrinking, but they have a long way to fall before the race becomes close.

It is possible that people will vote for the mayor because they like what his administration has done (which is a great deal). Many older New Yorkers are not enamored of the Democratic machine and the clubhouse government that ruled New York before Ed Koch was elected mayor in 1977, the year of Congressman Anthony Weiner’s bar mitzvah. It was the summer Barry Obama turned 16, playing basketball for the prestigious and private Punahou High School in Honolulu, which IS in the United States.

Other voters may be persuaded if and when they see Democrats crossing party lines to endorse the mayor. Some may see Bloomberg’s opponents as lacking in gravitas. But that was the way Koch was widely perceived, just a few months before he won the Democratic primary and runoff, defeating Mario Cuomo, incumbent Abe Beame, Bella Abzug, Percy Sutton, Herman Badillo and Joel Harnett. When you win a big election, people believe you grew up overnight. If you lose, they think you aged just as quickly.

Sic transit gloria mundi.


#536 02.23.2009 1079 wds

No comments:

Post a Comment